On October 27, the Reserve Bank of India (RBI) announced that the Monetary Policy Committee (MPC) would meet one more on November 3, 2022. This meeting has been scheduled because the Consumer Price Index (CPI) inflation target has not been met by the RBI for three consecutive quarters, or nine consecutive months, from January to September 2022.
The Reserve Bank of India (RBI) Act, 1934’s Section 45ZN allows for the scheduling of meetings, the RBI stated when making the announcement.
The central bank also cited the 2016 Monetary Policy Process Regulation and Regulation 7 of the RBI Monetary Policy Committee (MPC).
What does the RBI Act’s Section 45ZN say?
This is the first time an MPC meeting has been held in accordance with Section 45ZN of the Act since the RBI adopted an inflation-targeting monetary policy regime in 2016.
According to this paragraph, the RBI must provide a report to the government outlining the reasons it was unable to achieve the inflation objective. The central bank will need to outline the corrective measures it plans to take in the report, along with an estimated time frame for when the inflation target would be reached following the prompt execution of the suggested corrective measures.
What does Regulation 7 (the other clause) say?
A separate meeting must be organized as part of the regular policy process in order to discuss and produce the report that will be submitted to the government, according to Regulation 7 of the RBI MPC and Monetary Policy Process Regulations, 2016.
Although the MPC is in charge of upholding the inflation objective, the RBI will write the report. The RBI has set the additional MPC meeting on November 3 because the MPC will be consulted.
When must RBI deliver the report?
Within a month of the date the RBI missed the inflation target, the report must be sent to the government. The September CPI inflation statistics in this instance were made public on October 12. The government will receive the report from the RBI no later than November 12th.
What time will the MPC meetings be held?
The MPC now meets every two months or six times in a fiscal year. The MPC meeting schedule for the entire fiscal year is published in advance. The MPC will convene from April 6–8, June 6–8, August 4–6, September 28–30, December 5–7, and February 6–8, 2023, the RBI announced at the start of this fiscal year.
The MPC has previously held meetings in April, June, August, and September according to this timetable. However, the MPC had an off-cycle meeting from May 2-4, 2022, during which it increased the repo rate for the first time in over four years by 40 basis points (bps).
Additionally, the upcoming meeting on November 3 will not follow the calendar provided at the start of the fiscal year.
News Mania Desk
